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A.S.O Shoes; a brand that is somewhat crude and perhaps even garish for leather footwear. How did it manage to become a franchise with over 100 chain stores from a mere roadside vendor in Taiwanese markets that is fastidious about trends and fashions? How is it able to be voted No.1 ideal brand for shoe products in Taiwan for so many consecutive years? What¡¦s the story behind this exemplary model for small and medium businesses in Taiwan that wish develop their own products? |
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| A.S.O in the initial stages |
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Mr. Luo Hsui-Mu, the founder of A.S.O Shoes, has always been addressed by his customers as ¡§A-so¡¨ (lit. ¡§skinny¡¨ in Taiwanese Mandarin) because he is thin; this nickname would later become the name of his company. In the beginning, Mr. Luo wasn¡¦t in the shoe business; he was a hawker who sold noodles for a living. Because of gambling debts, he lost his entire stall and had to make money by working as a shoeshine . When Mr. Luo was 30 years old, he pawned his watch for NTD 20 to start his own shoe polishing business. This shoe polishing stall was also the predecessor to A.S.O Shoes. After 14 years in the shoe polishing business, Mr. Luo was so skilled in the trade that people often mistook the shoes he had polished to be brand new ones, and people would often stop by his store to ask the price of those shoes. And thus, Mr. Luo hung a sign that read ¡§A.S.O Shoe Vendor¡¨ in front of his shoeshine stall when he was 37 years old. |
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| The history of A.S.O Shoes |
¡· 1952-1966 A.S.O Shoe Vendor
¡· 1966-1971 A.S.O Gents¡¦ Shoe Stand
¡· 1971-1986 A.S.O Twinhorse Leather Shoe Store
(Multiple stores in Taipei City)
¡· 1987-2001 A.S.O Shoes retail stores
(Franchise stores across the country/conservative development)
¡· 2002-2005 Period of rapid expansion
(50th Anniversary ¡V Celebration of the 10 millionth pair of A.S.O shoes sold) |
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| While the company was still ¡§A.S.O Shoe Vendor¡¨, Mr. Luo made a critical decision that proved to be the seed of A.S.O Shoes¡¦ success as an established brand in the future; and that decision was to advertise his products. As the A.S.O Shoe Vendor attracted more customers, a salesman from a radio broadcasting station approached Mr. Luo to offer midnight air time to advertise his business. Back then, television had not been invented, and radio was the source for entertainment for the general population. This salesman often bought shoes from Mr.Luo. Seeing how good business was for Mr. Luo¡¦s shoe store, he came up with the idea to offer him commercial air time in the middle of a midnight program that no one wanted. Mr. Luo was reluctant about the idea in the beginning because he was afraid that he might offend some of his customers. The salesman tempted him further by offering him a 50% discount on the advertising fee. Mr. Luo made a quick calculation; the advertising fee for one week was roughly equivalent to the price of four pairs of shoes, so he took up the offer. What Mr. Luo didn¡¦t expect was that this decision would eventually become the founding stone of his legendary shoe kingdom. Back then, most radio commercials were about medicines and health supplements, and Mr. Luo¡¦s shoe advertisement stood out particularly among the other commercials. As a result, a large number of consumers remembered his shoes in a very short time. Since the amount Mr. Luo spent for the commercial came to 5% of the sales of his shoe store, it led to his decision to set the rule of allocating 5% of the company¡¦s turnover to become the budget for all advertising purposes. And this is how a roadside shoe vendor became a well-known shoe brand across the country. |
| Even though A.S.O Shoes is an old company, it has very creative marketing concepts: |
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| Insistence on product quality |
| Facing competition from competitors, Mr. Luo has also produced several new products in order to go along with trends. Mr. Luo has insisted on ¡§being different¡¨ in the research and development for A.S.O Shoes¡¦ new products in order to differentiate their shoes from other companies. To offer customers something different was the biggest motivation that drove Mr. Luo in developing new products. Mr. Luo hopes that every time their customers patronize their store, they would be able to find something new. Using ¡§freshness¡¨ as an appeal to retain old customers and attract new patrons is one of the marketing strategies used by A.S.O Shoes. |
| In the company¡¦s early stages, Mr. Luo outsourced most product design due to a lack of professional designers. But that is not to say that A.S.O Shoes has been careless about their product design. Back then, Mr, Luo would make it a point to visit Japan occasionally in order to get an idea of the latest trends in the shoe business in Japan and apply this knowledge for the designs of his shoes. And now, after accumulating experience and having trained its own professional designers, 70% of A.S.O Shoes¡¦ product lineup are designed by the company¡¦s own designers. The rest are designed by suppliers. A.S.O Shoes is also constantly on the look out for the latest trends in order to provide new styles for consumers to choose from and give a sense of freshness to their products. The second generation owner of A.S.O Shoes, Mr. Luo Jung-Yue, said that ¡§innovation is the key to success. Since shoes produced nowadays take a long time to be worn out, we must keep adding variations to our product styles in order to attract customers.¡¨ He also stressed that the only way to enhance a company¡¦s competitiveness in the market and gain customers¡¦ trust is to take an active stance in creating charisma for its brand and a professional image. |
| A.S.O Shoe¡¦s product development can be divided into several stages |
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| A reconstruction after 50 years |
| A.S.O Shoes celebrated its 50th anniversary in 2002, and Mr. Luo has passed the responsibility of managing the company to the 2nd generation, General Manager Mr. Luo Jung-Yue. Though the company has developed into a franchise with 8 chain stores (including sales counters in departmental stores), A.S.O Shoes has made no movement to expand its business for the past 4 years. As the company looked back at its achievements in the past, Mr. Luo Jung-Yue had a new understanding in the changes of the market pattern. He realized that the traditional way of using products to advertise a brand is no longer suitable in today¡¦s market; the promotion of a brand must be done through marketing. A.S.O Shoe¡¦s long history of operation in the past created a stereotypical image of being old and outdated, and no consumers likes that. With such a negative image, they would not be able to draw any business even if they have the best products in the world. Therefore the new owner of A.S.O Shoes made a major decision in 2002; the company will break free from the old image in the past to recreate one that is more fitting for an internationalized and modern enterprise. |
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| The central concepts of renewal |
The company conducted a market survey of consumer¡¦s opinions on their footwear products. The results showed that male consumers have a very traditional image of A.S.O Shoes. Most of the male participants in the survey felt that A.S.O Shoes are quality shoes designed specifically for older males. The female participants in the survey thought A.S.O Shoes were designed for the Taiwanese population with a high product exposure. They also felt that the brand represents tradition and a long history, and that A.S.O Shoes are suitable for the elderly. The common belief in the company¡¦s product between the male and female participants in the research was on the notion of ¡§being traditional¡¨ and ¡§suitable for the elderly¡¨. In order to change this brand image, A.S.O Shoes has taken on a brand renewal project with the focus of giving the company a new image of being global, fashionable and metropolitan in order to change the consumer¡¦s impression of the brand that ¡§A.S.O Shoes are shoes for the elderly¡¨ |
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| Brand management strategies & Breakthroughs in marketing strategies |
| Your wish for comfortable footwear with a good look is granted! |
| The goals and ambitions of A.S.O Shoes in the future |
¡¼ Keep up with market cultivation efforts
¡¼ Aim for corporate internationalization
¡¼ Develop new brand systems |
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| Market opportunities of leather footwear in Taiwan |
| Transition to a new beginning |
| Overseas development in Australia |
Original brand: L&J¡]Love & Joy¡^
¡¼ Retail stores: 7 in Brisbane
¡¼ Product styles: Fashionable footwear for males and females
¡¼ Future development: Setting up branches in Sydney and Melbourne |
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| Second in the new brand series ¢w Beso |
| Third in the new brand series ¢w Freno |
| A.S.O Shoes: the results of renewal |
| In order to satisfy the needs of different segments of consumers, A.S.O Shoes has created the following new brand names: |
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L & J: a secondary brand of A.S.O in Australia; famous for its high quality feel and elegant design |
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effie: a brand with touches of French-styled romance designed specifically for pink-collar workers |
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Beso: a brand targeted at adolescent girls; stresses a variety of vivid colors to express youthful energies |
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freno: a brand of unisex casual footwear, offering consumers their own styles while being sporty or casual |
| To A.S.O Shoes, brand is its most important asset. When the company introduced its brand new image, it successfully captured the attention of its target audience. A.S.O Shoes capitalized on this opportunity and began its massive expansion, and its annual turnover shot through the roof from NTD 500 million NT to NTD 3 billion. In 2005, A.S.O Shoes¡¦s turnover was nearly NTD 4 billion. |
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| Charging up energy in preparation for growth |
¡¼ Effective management of brand; rapid replication of successful experiences
in franchising
¡¼ Deployment of a team of elites to enhance innovation and R&D
¡¼ Powerful marketing approaches and distribution channels
¡¼ Quality merchandise and services nvest in the future for continued growth |
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